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Celsius users are closer to getting their bitcoins back if judge rules in their favor

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Key facts:
  • If the judge determines that the funds came from Celsius, users would be charged “cents.”

  • If the judge rules in favor of the users, there is still some way to go before the funds are recovered.

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Users who were affected by the bankruptcy of bitcoin (BTC) and cryptocurrency lender Celsius may be close to recovering their funds. A U.S. judge is considering determining the ownership of assets frozen after the company declared bankruptcy, Reuters reported.

The judge is Martin Glenn, a bankruptcy judge in New York. The jurist said at the hearing on Wednesday, Dec. 7, that would be willing to resolve the existing discrepancy on the Celsius bankruptcy, which was publicly announced on July 13 this year, as reported by CryptoNews.

“(The case) can get complicated. I’m trying to solve as many problems as possible,” Judge Glenn said during the hearing.

According to Reuters, if Judge Glenn determines that the funds deposited in Celsius belong to the customers, “it is much more likely that the users will recover their assets.” However, if the opposite is true and the money is found to be Celsius’, “customers will be at the back of the line collecting pennies.”

But it is not that simple. Even if the judge rules that the funds belong to the users, there is still some way to go before they can get them back. Companies such as Celsius, which has filed for bankruptcy, may argue that they do not have enough money to return the assets to all concerned.That would result in random deposits.

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As reported by Reuters, Celsius wants Judge Glenn to declare that the cryptocurrencies in the exchange’s deposit accounts belong to customers. Also, to require that the holdings in the high-yield accounts are owned by Celsius.

If true, this would confirm the company’s position. The company’s lawyers said days later of the bankruptcy filing that the funds within the platform belong to the companyunder the terms and conditions of Celsius, as reported by CryptoNews.

The rulings that may emerge from Judge Glenn’s hearings could be useful for other cases similar to Celsius. These include lenders Voyager Digital and BlockFI, as well as FTX, which was one of the largest exchanges in the market and collapsed on Nov. 11.

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In all these cases, users were the hardest hit. FTX alone is estimated to have lost more than $8 billion. And looming over all this is uncertainty about the fate of the funds still frozen.

What happened to Celsius?

As reported by CryptoNews, the cryptocurrency lender has gone into crisis, possibly due to its holdings in the synthetic token stETH., which does not have a 1:1 parity with Ethereum’s ether cryptocurrency (ETH). Added to this were. Massive withdrawals by clients, which led to a liquidity crisis of the company.

This caused the company to suspend withdrawals and, less than a month later, filed for bankruptcy, under Chapter 11 of the United States Bankruptcy Code.

As is, more than 1.7 million registered Celsius users have found themselves with frozen funds or restricted, with no clear date for the return of their money.

Now, with Judge Glenn’s move, clients may have hope of seeing their funds withheldwhich amount to an average of $4.7 billion.

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